An increase in the price level results in a/n _________in the demand for money, which, all else being the same, results in a/n_________ in the interest rate.
A) increase; increase
B) decrease; decrease
C) decrease; increase
D) increase; decrease

Question

Quizplus · Accepted Answer

An increase in the price level leads to an increase in the demand for money as people need more money to buy the same goods and services, which, all else being equal, results in an increase in the interest rate.

An Increase in the Price Level Results in A/n _________In